CAP Reform: Do I need to worry yet?

25th February 2014

In our series covering Cap Reform, Claire Bainbridge, Director of Research for George F White highlights some of the areas of the CAP reform process.

There’s been so much in the press about the reforms of the Common Agricultural Policy that it’s very easy to think that it’s all still a long way off. It’s not. This May will be the last time you fill in a Single Payment Scheme Form , and by 1st January next year, you may need to already have elements of the new Greening in place. In the first of this short series I will discuss what’s staying, and what’s new

What’s staying in place…..for now? The regions that we are familiar with will remain in place for now; Lowland (Non SDA), Severely Disadvantaged (SDA) and Moorland. Cross Compliance is still in place linked to the Statutory Management requirements (SMR’s) and Good Agricultural and Environmental conditions (GAEC’s) as well as the penalties for non-compliance. Existing entitlements will be rolled forward into the new scheme, rather than establishing new entitlements.

What’s new and changing. The single payment scheme (SPS) will stop after 2014 and the Basic Payment Scheme (BPS) will take its place. SPS entitlements become BPS entitlements. These BPS entitlements have 2 elements, 70% of the subsidy you will receive is linked to cross compliance, and 30% will be linked to Greening.

Greening is new, and is mandatory and comprises of 3 elements; Maintaining Existing Permanent Grassland, Crop Diversification and Ecological Focus Areas. This new Greening element can be complex depending on your current farming system or farm type. Aspects of Greening will be discussed in more detail in the series.

What has been agreed is that the rate of payment will be ‘equalised’ between the Lowland and SDA regions. This in reality means a small decrease in the lowland rate and a significant increase in the SDA rate. It’s not yet been agreed whether the Moorland rate will enjoy a similar increase in payment level.

Modulation, the amount of money that is transferred out of the Direct Payment pillar into the Rural Development pillar (which funds stewardship schemes and grants amongst other things) is to be set at 12% initially with a review in 2016 to possibly increase the rate to 15% in 2018 and 2019. Wales have set their modulation at the maximum 15% and Scotland at 9.5%.

An Active Farmer test will be introduced with 2 elements to the test. Part 1 contains a negative list – if you fall on the negative list you cannot apply, except under certain conditions – the negative list includes water works, sports grounds and airports. The second and more relevant element is the “Minimum activity” criteria. The government have still not set this element yet.

The minimum claim threshold will now be set at 5 Ha (rather than 2ha under the SPS). For those claimants who now fall below this size a number of options are available. These will be covered in more detail within the series.

This new scheme has a huge amount of detail to it and with further decisions and detail still emerging it is as ever important to take advice. Next in the series: Greening. How complicated can it be?

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